Obama Should Advise FCC, DOJ On Comcast/TWC Merger Too

| by Will Hagle

President Obama released a video message and a written statement today expressing his views on net neutrality.

The President voiced his support for Title II reclassification of broadband service, making access to the Internet a public utility that could be more closely regulated by the FCC. He explained his opposition to Internet “fast lanes,” which could be created under the FCC’s new rules.  

“We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas,” Obama wrote in his official statement regarding the issue.  

Obama’s comments echo the sentiments of the thousands of Americans who crashed the FCC site with comments of their own a couple months ago. His decision to publicly address the FCC about his commitment to net neutrality with a specific plan is an example of strength in leadership at a crucial time. Yet a key sentence in his written statement could potentially render his entire argument irrelevant: “The FCC is an independent agency, and ultimately this decision is theirs alone.” 

Of course, FCC Chairman Tom Wheeler was appointed by Obama, so the president will ultimately be connected in some capacity to the agency’s decision. That’s why it was important for him to get his personal views across. But aside from his video and written statement, there’s not much he can actually do. Even Verizon has already responded to Obama’s comments, claiming his plan “will likely also face strong legal challenges and would likely not stand up in court.” 

Perhaps surpassing the importance of net neutrality is another issue over which the President could exercise more influence: Comcast’s proposed merger with Time Warner. The merger, which has been under review by Congress, the FCC and the Department of Justice, poses similarly significant concerns for competition in the telecommunications industry. Opponents of the merger argue that Comcast could negatively impact smaller video distribution companies like Netflix or Hulu while favoring their own service. The company would also dominate a vast majority of the market, creating a monopoly over how the Internet is accessed. 

Although Obama did not directly address the Comcast and Time Warner merger, his comments may have an effect on the likelihood of the merger going through. If those at the FCC or the DOJ (again, appointed by Obama) follow the President’s policies for an open and equal Internet, it’s tough to imagine the Comcast deal being approved. Wall Street has already reacted based on those concerns, sending Time Warner Cable, Comcast and Charter Communications stock down 4 percent within hours.

Investors expect Obama’s words to have a major impact on the merger, but whether they will remains to be seen. Many politicians have voiced their disapproval of the deal, and the President should also acknowledge the negative effect this would have on the competitive nature of the Internet as we know it.